Paul Krugman

US underlying (core) inflation at the end of 2022 will be far below 1980 levels (around 10 percent or more).

“For one thing, despite high headline numbers lately, underlying inflation by the end of 2022 isn't likely to be anywhere near 1980 levels.”

Said on

16 December 2021 · New York Times column "What Would a Hard Economic Landing Look Like?", written after the Fed's Wednesday Dec 15, 2021 decision; reprinted in The Salt Lake Tribune Dec 20, 2021

Source

Paul Krugman: What would a hard economic landing look like? · The Salt Lake Tribune (New York Times syndication)

Should come true

2022

How sure they sounded

isn't likely

Categories

Economy

Importance

3 of 5 · Whether US inflation became 1970s-style determined how painful the Fed's disinflation would be.

Outcome

Accurate Happened 31 December 2022.

Core CPI inflation was 5.7 percent over the 12 months to December 2022 (BLS), far below the roughly 12 percent core inflation of 1980. Inflation was higher than Krugman expected elsewhere, but this specific claim held.

Evidence:

• https://www.bls.gov/news.release/archives/cpi_01122023.htm
• https://fred.stlouisfed.org/series/CPILFESL